927 F.

2d 1132

SHELTER MUTUAL INSURANCE COMPANY, PlaintiffAppellee,

v.
Clint Jason LITTLEJIM; John A. Short; Jerry Wayne Smith;
Nelson Jacob; State Farm Mutual Automobile Insurance
Company; Farmers Insurance Group; Farmers Insurance
Company, Inc.; Mid-Century Insurance Company; Defendants,
Jim Kearnes, Surviving Heir of Angela Caye Kearnes,
Deceased, Defendant-Appellant.
No. 89-6433.

United States Court of Appeals,

Tenth Circuit.
March 12, 1991.

Kenneth R. Coe, Oklahoma City, Okl., for defendant-appellant.

Michael C. Stewart and Kenneth A. Brokaw of Stewart & Elder,
Oklahoma City, Okl., for plaintiff-appellee.
Before ANDERSON, TACHA, and BRORBY, Circuit Judges.
STEPHEN H. ANDERSON, Circuit Judge.

Plaintiff, Shelter Mutual Insurance Company, commenced this action in district

court seeking a declaratory judgment pursuant to 28 U.S.C. Sec. 2201. The
district court held that Shelter was not liable to defendants under the terms of its
policy with its named insureds, Joe and Pamela Kinzer. We affirm.1

The undisputed facts show that Joe and Pamela Kinzer purchased a vehicle to
be used primarily by their son, Justin, while he was attending college. Justin
was instructed by his parents not to allow anyone else to drive the car. On
October 17, 1986, Justin drove defendant LittleJim to a nearby town where
each had several beers. At some point, Justin gave the car keys to LittleJim to

hold for him. Later that evening, LittleJim took the car and was involved in an
accident with two other vehicles, one operated by defendant Smith, the other
operated by the decedent Angela Caye Kearnes. LittleJim was insured by
defendant, State Farm. Smith was insured by defendant, Mid-Century. Kearnes
was insured by defendant, Farmers Insurance Company.
3

Shelter alleged that LittleJim was operating the Kinzer vehicle without the
permission of the named insureds. Therefore, Shelter alleged it was not liable to
LittleJim for any claims arising from the accident.

The district court dismissed Farmers Insurance Group, Farmers Insurance

Company, and Mid-Century on jurisdictional grounds. Only defendants
LittleJim and Kearnes opposed Shelter's motion for summary judgment. The
court granted Shelter's motion declaring that Shelter was not liable for payment
of any of defendants' claims against LittleJim. The court denied State Farm's
motion for summary judgment on its cross-claim against LittleJim finding that
there were "genuine factual issues as to whether Littlejim [sic] had the implied
consent of Justin Kinzer to operate the vehicle in question." R. 89 at 6. State
Farm then settled with Kearnes and agreed to continue its defense of LittleJim.
Final judgment having been entered, Kearnes appealed the district court's grant
of summary judgment to Shelter.

On appeal, Kearnes argues that Shelter is liable on the Kinzer's policy because
Justin Kinzer was an insured and gave either express or implied permission to
LittleJim to drive the car. Kearnes also argues that Shelter must provide
coverage pursuant to Okla.Stat. tit. 47, Sec. 7-601, the policy should be
reformed to add Justin Kinzer as a named insured, and LittleJim was covered
under the terms of the policy as a permissive user.

A motion for summary judgment shall be granted if all the materials on file
"show that there is no genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). We
review the district court's grant of summary judgment de novo, applying the
same legal standard used by the district court under Fed.R.Civ.P. 56(c).
Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241
(10th Cir.1990). Because the parties do not dispute any of the material facts
found by the district court, we need only determine if the district court correctly
applied the substantive law. See id.

Shelter's policy defines an insured person as:

(a) You,

(b) Your relatives,

10

(c) Any other person using the auto if its use is within the scope of your
permission.

11

R. 18 Ex. A at 4, emphasis in original. "You" and "your" are defined as the

named insured and spouse. Id. at 3.

12

By the clear and unambiguous terms of the policy, Shelter would be obligated
to provide coverage here only if Joe or Pamela Kinzer, the named insureds,
gave permission to LittleJim to use the vehicle. While Justin Kinzer is insured
under the terms of the policy, any permission, explicit or implied, that he may
have given will not implicate Shelter's obligation to provide coverage here.

13

Kearnes argues that Shelter must provide coverage pursuant to Oklahoma's

public policy that innocent victims should be protected as codified in Okla.Stat.
tit. 47, Sec. 7-601 B. Kearnes argues the statute requires that the operator, here
Justin Kinzer, be insured in the same manner as the owner. Therefore, Justin
could give permission to others to use the vehicle. Kearnes argues that any
other interpretation of the statute would violate public policy.

14

Okla.Stat. tit. 47, Sec. 7-601 B provides that

15 owner of a motor vehicle ... shall, at all times, maintain in force ... security for
every
the payment of loss resulting from the liability imposed by law for bodily injury,
death and property damage sustained by any person arising out of the ownership,
maintenance, operation or use of the vehicle. Every person, while operating or using
a motor vehicle ... which is not owned by such person, shall maintain in force
security for the payment of loss resulting from the liability imposed by law for
bodily injury, death or property damage sustained by any person arising out of the
operation or use of the vehicle, unless such security has been provided by the owner
in accordance with this section which does not exclude said person from coverage.
16

While this statute clearly places the obligation to insure on the owner, and in
some cases on the operator, of a motor vehicle, it does not operate to require an
insurance company to provide coverage which is clearly outside the terms of its
policy. See Allstate Ins. Co. v. Brown, 920 F.2d 664, 668-69 (10th Cir.1990).
We will not create an insurance contract on the grounds of public policy. Here,

the named insureds did provide coverage for the operator to whom they had
given permission to use the vehicle, Justin Kinzer.
17

Kearnes also argues that the policy should be reformed to add Justin Kinzer as
a named insured. Kearnes, not being a party to the contract, has no standing to
seek its reformation. See Bradham v. United States, 168 F.2d 905, 907 (10th
Cir.1948), cert. denied, 335 U.S. 903, 69 S.Ct. 407, 93 L.Ed. 437 (1949); see
also Pasternak v. Lear Petroleum Exploration, Inc., 790 F.2d 828, 835 (10th
Cir.1986) (under Oklahoma law, party seeking reformation must show he was
free of neglect in making agreement). We decline to depart from established
Tenth Circuit and Oklahoma state law in order to accept Kearnes' final
argument that LittleJim used the vehicle as a "second permittee" and, therefore,
was covered under the terms of the policy.

18

The judgment of the United States District Court for the Western District of
Oklahoma is AFFIRMED.

After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination
of this appeal. See Fed.R.App.P. 34(a); 10th Cir. R. 34.1.9. The case is
therefore ordered submitted without oral argument